Dynamic pricing just tried to bite me

When I looked yesterday it was only $22.50 - today it's gone up to $46.26 - I think they're watching me!

It's funny how you can be unaware of something and not realize that it's happening, but once you are made aware, you start to see a pattern…

As one such example, I know that online adverts are increasingly being targeted towards individuals, but it's only over the last couple of days that I've really started to notice it happening to me.

I've also heard the term Dynamic Pricing being bandied around recently – the idea being that online retailers may change their prices multiple times a day; raising prices whenever they can and lowering prices when they must.

In fact, there was a talk about dynamic pricing on the NPR (National Public Radio) when I was driving into work just the other day, and I remember thinking "Hmm, that's interesting." I also remember thinking that it would not really affect me. I was younger and much more foolish then. Let me explain how dynamic pricing just tried to bite me on the bottom…

As an aside, this would be a GREAT time to bounce over to the Design West Registration Page to get the Early Bird Specials while the getting is good. Even if you can't persuade your company to spring for the full-up technical conference (you really should try to get them to send you), the FREE Exhibit Pass gains you access to three days of Expo (Tuesday - Thursday), which includes access to 250+ exhibitors, sponsored sessions, show floor theater events, keynotes, industry addresses, giveaways and more. And then there's the Expo Plus Pass, which – in addition to everything on the FREE Exhibit Pass – gains you access to DESIGN On Demand that houses DESIGN proceedings and video AND THREE FREE ONE CLASS PASSES (which means you could attend my Danger Will Robinson! presentation, for example).

But we digress… in my presentation I'm going to be talking about the effects of both ionizing and non-ionizing radiation. As part of this, I've decided to employ a "prop" in the form of a small suitcase that contains an "electronic device of nefarious nature." I'm going to use this to demonstrate how even something as simple as someone calling you on your smartphone can generate enough radiation to affect the system in the suitcase.

Of course, the first thing I need is an appropriate suitcase. I really wanted something that had some visual interest, so I called my inventor friend, Brian LaGrave, who is the master of rooting interesting things out on the Internet. Brian came up with an out-of-the-ordinary wood-and-leather offering on Amazon as shown below (I'll be using the larger, outer case for my demo). This little rascal (the suitcase, not Brian) looks as though it could contain something important, plus it's small enough for me to easily carry it around.

As soon as this arrives, I'm going to equip the outside with some interesting switches, along with a Red light and a Green light – all having a Steampunk look-and-feel (see also my column There's a Steampunk Mouse in the House!) I'm also going to add the super-secret electronic system, but I'm not going to talk about that part until after the Design West conference is over because I don’t want to give the game away.

So all was happy in the "House of Max," but then I started to ponder… some time ago I saw an electronic clock with lots of moving gears, and I started to think that this might look rather tasty as part of my device, so I took a look around the Internet and ran across the following Geared Clock on Amazon:

Now, imagine having a hole cut in the suitcase so that all you can see is the middle part of the clock with the gears – something like the quick version I just created below. In my case I will take the black hour and minute hands off the device and leave only the red second hand. When the device is triggered and the red light starts flashing, the red second hand will start to spin around along with all of the gears.

So why am I waffling on about all of this? Oh yes, I remember now. When I first saw this clock on Amazon yesterday afternoon, the price was something like $22.50. I decided to "sleep" on this because I was worried that I might be getting carried away (I know you don’t believe this could happen).

Early this morning, while browsing the Internet researching another column, I suddenly realized that I was being presented with a lot of adverts for interesting suitcases and geared clocks … obviously the search engines have been keeping track of what I've been looking at.

Even more interesting, a few minutes ago I described what I was doing to another friend and asked if he thought that adding this clock to my suitcase device would be overkill. He replied "Of course it’s overkill – they don’t call you "Max Overkill" for nothing – but I think it's great and you have to do it."

So I returned to Amazon poised to place my order, only to discover that the price on the clock on Amazon had now rocketed up to $46.20 – almost 100% increase in a little more than 12 hours (goodness only knows what the price is now). It seems to me that Amazon's system has decided that (a) I'm really interested in this clock [I came back] and (b) I'm stupid enough to pay $46.20 today for something that would have cost me only $22.50 yesterday.

Fortunately, this clock is available on a number of other websites – all with different prices – the trick is to find the lowest price and then quickly place one's order before that price goes up.

The world gets stranger and stranger every day. This dynamic pricing concept seems really weird to me, but I have the feeling this is the "wave of the future" and that it won't be long before younger folks start to think that the world was always thus…

What do you think? Have you heard of dynamic pricing or noticed it yourself. And do you agree that this is just the beginning of a new online sales strategy that will affect a large number of online stores before long?

If you found this article to be of interest, visit Programmable Logic Designline where – in addition to my Max's Cool Beans blogs – you will find the latest and greatest design, technology, product, and news articles with regard to programmable logic devices of every flavor and size (FPGAs, CPLDs, CSSPs, PSoCs...).

Also, you can obtain a highlights update delivered directly to your inbox by signing up for my weekly newsletter – just Click Here to request this newsletter using the Manage Newsletters tab (if you aren't already a member you'll be asked to register, but it's free and painless so don't let that stop you [grin]).

Along similar lines, I've noticed that Delta's website gives different results depending on which browser you use. For various reasons I always have a Chrome and Firefox window open and use them interchangeably. This last summer I was searching for tickets to Europe and happened upon different flight availability and pricing results for the exact same searching steps. I repeated this many times and also checked on IE which had yet another set of results.

You need to get off your arse, Max (or if you're always just sitting there doing internet transactions and postings, maybe it's max-arse), and head down to Goodwill for stuff like what you're trying to acquire.
It recycles something that's already consumed resources, and it also puts a random variable into your preconceived notion of what you're building. You also need to get yourself an IP address spoofer and throw a wrench into the MBAs' evil plans of world domination by emptying your wallet.

I remember that years ago, one Amazon started to dabble with dynamic pricing this way, a common advice on the forums was to delete your Amazon cookie to get low price they are trying to hook new customers.
On a few occasions, with other vendors, I've also seen the opposite, where the price was starting out higher, to catch the impulse buyers. Then, if you were thinking about it and going back to check the item out again, they would drop the price a bit to give you some additional incentive to make your mind up.
There are many different pricing tricks employed these days. A lot of people use pricing search engines and just spring for the lowest price. I've noticed with some vendors, that if you follow the link from the price engine, it gives you a price but if you visit the vendor's website directly, you see a higher price.
Another example. For some items, kogan.com.au has a pricing clock, which starts out low (often meaning preordering an item) which then keeps counting up and the price may be $370.04 (and slowly increasing) with a note "Be quick or pay $389.00". At least this is pretty transparent, no under the table tricks.
Of course, dynamic pricing is an age old phenomenon and it can be based on many things. Frequent travellers would be very familiar with situations where certain items or services would have one price for the locals and a higher one for the tourists. In many poor countries, just the fact that you are able to travel, automatically marks you out as a rich person.
I think dynamic pricing started the very first time somebody tried to sell something!

The very worst cases of dynamic pricing were covered in a design publication a few years back, talking about how wonderful the smart vending machines would be, since they could boost the price of a cold drink as the day got hotter. So that when the ambient was much warmer the pop cost a lot more. I would suspect that a machine like that might sometimes suffer from a tube of SuperGlue in the coin slot. Some folks just don't seem to have much of a sense of humor.

I love Amazon, but have gotten bit with "Dynamic Pricing" many times. I just walk away. If more people do this, it will probably result in less sales revenue instead of more. And eventually the powers that set up the pricing rules will get the message.